New York Times Announces Salary Cuts

The New York Times Company chairman Arthur Sulzberger Jr and CEO Janet Robinson announced today that they are cutting the salaries of New York Times editors, as well as all employees on the corporate side by 5 percent through the end of December. Mr. Sulzberger, along with Times executive editor Bill Keller, is also asking that Guild members—who make up the majority of the reporters in the newsroom—take a 5 percent pay cut in order avoid layoffs. Mr. Sulzberger also announced there would be 100 layoffs on the business side of the paper.

“This was a very difficult decision to make,” Mr. Sulzberger and Ms. Robinson wrote in a memo. “The environment we are in is the toughest we have seen in our years in business.”

Times editors and corporate managers at the Times Company will be given extra vacation time to compensate. Members from the Times Company will meet with the Guild at 2:30 p.m. this afternoon, according to Grant Glickson, the grievance chairperson for The New York Times unit of the Newspaper Guild of New York. They’ll ask that members of the Guild also agree to a 5 percent cut and take an additional 10 days off “in a spirit of shared sacrifice and as a way to otherwise avoid layoffs in the newsroom,” wrote Mr. Keller, Times GM Scott Heekin-Canedy, editorial page editor Andy Rosenthal and global editions editor Martin Gottlieb in a memo.

They said that salaries would be restored to their normal level next year, but they warned that even that “depends on the state of our business.”

The Times newspaper also will take several steps to cut production costs, including doing away with the expanded index to the paper, created last year, that appears on the second, third and fourth pages every day. The Times will return to something more like the smaller guide to the paper that used to appear on the second page, saving several millions dollars annually on newsprint. The newsroom will reduce its freelance budget. And there may be some further merging of sections of the paper, which saves on printing costs.

At 3 p.m. today, Bill Keller will address the entire newsroom on the third floor and answer questions from today’s announcement. The last time he addressed the newsroom like this, it was last year for Pulitzer day.

The mood, not surprisingly, is not particularly upbeat at 620 Eighth Avenue.

There’s a sense that this had to happen, and a sense that this won’t be the last round of bad news. Update, 2:36 p.m.: “An already fearful newsroom just became terrified,” said one reporter.

“Devastated,” said one source, who added that the newsroom is doing its best to “keep its head high.”

Unlike nearly every other newspaper in the country, The Times has gone to incredible lengths to avoid job cuts. In February 2008, well before we knew where the economy would turn, and well before it was clear how disastrous the upcoming year would be for newspapers, the paper announced 100 jobs cuts. The paper has not cut from the newsroom since.

At 1,300 people, The Times‘ newsroom total is by far the largest in the country.

Here are the memos:

“Dear Colleagues,

“As you know, the global economic crisis is taking its toll on a broad range of businesses and sectors, here in the U.S. and around the world. We have reported in our own newspapers and on our own Web sites that the economy is likely to continue struggling throughout this year and possibly longer.

“Given this economic outlook and the changes occurring in the media business, we, regrettably, must take even more steps to lower costs. We have been, and continue to, reorganize and reduce our staff, which means we are saying goodbye to many of our close colleagues. Now, in addition, we are lowering salaries through the end of this year for all remaining nonunion employees and, in exchange, providing additional time off. We plan to approach the Newspaper Guild in New York to ask for its participation in the program and to continue working with our unions in Boston and our other locations on lowering our costs, including wage reductions.

“The salaries of all employees at The New York Times Media Group (with the exception of the IHT, which is working on other cost reduction measures), The Boston Globe, Boston.com and Corporate in New York will be rolled back by 5%, starting this April, and these employees will receive 10 additional days off to use before the end of the year.

“At the About Group, Baseline, Globe Direct, International Media Concepts, Regional Media Group, Shared Services Center and Worcester Telegram & Gazette, the approach is similar, with salaries being rolled back by 2.5% with five additional days off. We made the distinction between the two groups by taking into account location and other factors. Next year, we plan to return salaries to their current levels. Of course, such a decision depends on the state of our business.

“Many of you will have questions about these actions. Your manager or department head has been briefed with more details and is your best source of information.

“This was a very difficult decision to make. The environment we are in is the toughest we have seen in our years in business. Across our Company, you and your colleagues have worked hard to introduce innovative products and services, reduce expenses and improve productivity. We are deeply grateful for your efforts and proud of your achievements. As we take these painful steps together, we remain confident that our great Company will keep moving forward to better times.

“Sincerely,

“Arthur & Janet”

“Dear Colleagues,

“In a note just distributed, Arthur and Janet informed us that the company, regrettably, must take even more aggressive steps to control our costs.

“Clearly, our course is not getting any easier. The recession, especially the deteriorating advertising climate, is exacting a bitter toll, despite all that we have already done to reduce spending. This morning, we notified about 100 employees on the business side of The Times that their jobs were being eliminated. We thank these dedicated colleagues for all they have contributed to The Times over the years.

“The broader announcement today outlines a temporary salary reduction for the remainder of the year for all non-union employees, including the top leadership of the company. It is our hope that these cost-cutting measures will allow us to avoid further layoffs.

“The details of the salary reduction will be communicated to you shortly by your senior managers. Although employee pay will be cut by 5% for the remaining three-quarters of the year, you will be entitled to 10 additional personal days off over the nine months. Next year, we plan to return salaries to their current levels. Of course, such a decision depends on the state of our business.

“In addition, we will be asking that our Guild-represented colleagues make a similar sacrifice. The Company plans to discuss this with the Guild leadership this afternoon, in a spirit of shared sacrifice and as a way to otherwise avoid layoffs in the newsroom.

“Navigating this difficult passage for our business has not been easy. We need to do what we can to reduce spending in the face of falling revenues. At the same time, it is vital we do everything possible to maintain the quality and reach of the journalism that is the hallmark of The Times and to support the resourcefulness and competitive edge of the Media Group’s business operations.

“Decisions such as today’s underscore the scale of the challenges facing us as we confront not only the structural changes reshaping our industry but also the deepening global recession.

“We honor those who will no longer work alongside us and extend our gratitude to them for their contributions. Further, we want to thank every one of you who are sacrificing a portion of your pay over the remainder of the year.